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Increased Benefit Generosity and the Impact on Workers’ Compensation Claiming Behavior

An Interrupted Time Series Study in Victoria, Australia

Lane, Tyler J., DPhil; Gray, Shannon E., PhD; Sheehan, Luke, MSc; Collie, Alex, PhD

Journal of Occupational and Environmental Medicine: March 2019 - Volume 61 - Issue 3 - p e82–e90
doi: 10.1097/JOM.0000000000001531
ORIGINAL ARTICLE
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Objective: To measure the effect of legislation in Victoria, Australia that increased workers’ compensation benefits, including a raised wage replacement cap for higher earners, on claiming behaviors.

Methods: Controlled interrupted time series of monthly claiming volumes and median disability duration, focusing on overall effects, impact among higher earners, and by condition type.

Results: Overall claiming increased 12%, driven by back/neck (18%), and other musculoskeletal conditions (14%). Overall disability duration did not change, though increased 27% among back/neck conditions. Among higher earners, findings on claiming were mixed, while disability duration increased 33%, driven by back/neck musculoskeletal (MSK) conditions (23%). Findings for mental health conditions were mixed.

Conclusions: The effect of benefit generosity on workers’ compensation claiming and disability duration varied by earnings and condition. Effects were strongest among musculoskeletal conditions.

Insurance, Work and Health Group, School of Public Health and Preventive Medicine, Monash University, Melbourne, VIC, Australia.

Address correspondence to: Tyler J. Lane, DPhil, Insurance, Work and Health Group, School of Public Health and Preventive Medicine, Monash University, 553 St Kilda Road, Melbourne, VIC 3004, Australia (tyler.lane@monash.edu).

Clinical significance: Applying an interrupted time series to administrative claims data, we analysed the effect of increasing benefit generosity on workers’ compensation claims, a first in Australia. Unique among such research, we examined the effect by condition type including mental health. Effects varied by condition and among higher earners.

Funding: This study was funded by Safe Work Australia and WorkSafe Victoria as part of a grant for the Compensation and Return to Work Effectiveness (ComPARE) Project. The former is a statutory agency responsible for improving workers’ compensation in Australia and the latter is a state government regulatory agency in Victoria, Australia.

Conflicts of Interest: None declared.

Supplemental digital contents are available for this article. Direct URL citation appears in the printed text and is provided in the HTML and PDF versions of this article on the journal's Web site (www.joem.org).

Copyright © 2019 by the American College of Occupational and Environmental Medicine